The Enlightened Capitalists … Cautionary tales of business pioneers who tried to do well by doing good
February 26, 2019
We’re all familiar with the drive for business to do more than make money, to contribute more broadly to society, and take greater responsibility for the world in which they operate.
Business leaders are increasingly pressured by citizens, consumers, and governments to address urgent social and environmental issues. Although some corporate executives remain deaf to such calls, over the last two centuries, a handful of business leaders in America and Britain have attempted to create business organizations that were both profitable and socially responsible.
In a new book The Enlightened Capitalists, James O’Toole (who is a former professor at the University of Southern California Marshall School of Business) explores the complicated history of business people who tried to marry the pursuit of profits with virtuous organizational practices—from British industrialist Robert Owen to American retailer John Cash Penney and jeans maker Levi Strauss to such modern-day entrepreneurs Anita Roddick and Tom Chappell.
He tells the largely forgotten stories of men and women who adopted forward-thinking business practices designed to serve the needs of their employees, customers, communities, and the natural environment. They wanted to prove that executives didn’t have to make trade-offs between profit and virtue.
O’Toole brings life to historical figures like William Lever, the inventor of bar soap who created the most profitable company in Britain and used his money to greatly improve the lives of his workers and their families. Eventually, he lost control of the company to creditors who promptly terminated the enlightened practices he had initiated—the fate of many idealistic capitalists.
He also highlights the journey of Patagonia, which operates as a benefit corporation (a legal structure that allows its leaders to prioritize decisions benefiting society over shareholder interests), and the relentless drive of its founder, Yvon Chouinard.
As a new generation attempts to address social problems through enlightened organizational leadership, O’Toole explores a major question being posed today in Britain and America: Are virtuous corporate practices compatible with shareholder capitalism?